A class-action lawsuit about stock pricing may influence the potential combination of the owner of the largest forklift manufacturer and the largest load-engagement maker.
On 22 October, TICO and Cascade said they had entered into a definitive agreement under which TICO would acquire Cascade for USD759 million. Trading in Cascade stock began in 1965.
On 2 November, a putative shareholder class action complaint was filed in the Circuit Court of the State of Oregon for the County of Multnomah (in Portland), captioned Joseph Polyak v. Robert C Warren Jr et al, Case No.1211-13933, Cascade says in a security filing.
Defendants include Cascade, TICO subsidiary Industrial Components and Attachments II Inc and seven individuals as Cascade directors.
“The complaint alleges generally that individual defendants have breached their fiduciary duties (and that Cascade and the TICO subsidiary) aided and abetted the purported breaches of fiduciary duties. . . by attempting to sell Cascade to TICO by means of an unfair process and for an unfair price.” TICO of Kariya plans to purchase 100% of the shares of Cascade for USD65 each, representing a 23% premium over Cascade’s volume-weighted average share price for the 60 days ended 19 October.
The plaintiff is seeking an “injunction prohibiting consummation of the proposed transaction, rescission (to the extent the proposed transaction has already been consummated), accounting to plaintiff and other members of the class for damages caused as a result of any breach of fiduciary duties and the payment of plaintiff’s attorneys’ fees and costs”.
Other law firms among those investigating the TICO-Cascade deal include Brodsky & Smith LLC of Bala Cynwyd, Pennsylvania; the law offices of Todd Garber of Los Angeles; the law offices of Howard G Smith of Bensalem, Pennsylvania; and Ryan & Maniskas LLP of Wayne, Pennsylvania.
Speculation about customer views
Observers wonder about the TICO plan to maintain separate reporting lines for its extensive Toyota forklift business and the Cascade product business and customer list. A message to Cascade employees says that Cascade “will be a separately operated company owned by TICO, Toyota lift trucks’ parent company (and that Toyota forklifts) will not receive any competitive preference or advantage as a result of our new ownership”.
Speculation exists about whether equipment manufacturers competing with Toyota will want to buy materials handling load engagement products from Cascade as a sister unit of the Toyota forklift business.
The situation could benefit publicly traded attachments maker Bolzoni SpA of Casoni di Podenzano, Italy. Bolzoni had 2011 sales of EUR115.8 million (USD150 million), and Cascade reported sales of USD535.8 million for the fiscal year ended 31 January.
Source: Forkliftaction NewsletterTags: cascade corp, Toyota, toyota forklift